B-132454, OCTOBER 31, 1957, 37 COMP. GEN. 287

B-132454: Oct 31, 1957

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TRANSPORTATION - STORAGE-IN-TRANSIT PRIVILEGES - INCREASED FREIGHT RATES - RETROACTIVE APPLICATION AN INCREASED FREIGHT RATE IN AN AMENDED QUOTATION WHICH BECAME EFFECTIVE WHILE A GOVERNMENT SHIPMENT WAS IN STORAGE AT THE TRANSIT POINT IS INAPPLICABLE UNDER A STORAGE-IN-TRANSIT CONTRACT WHICH BECAME EFFECTIVE WITH THE ACCEPTANCE OF THE GOODS AT THE INITIAL POINT OF ORIGIN AND ENTITLED THE GOVERNMENT TO HAVE THE GOODS TRANSPORTED TO THE FINAL DESTINATION AT THE FREIGHT RATE IN EFFECT WHEN THE SHIPMENT COMMENCED. 1957: REFERENCE IS MADE TO YOUR REQUEST. THE SHIPMENT WAS REFORWARDED FROM THE TRANSIT STATION TO NEW ORLEANS. THE SHIPMENT WAS IN STORAGE AT THE TRANSIT STATION FOR MORE THAN 12.

B-132454, OCTOBER 31, 1957, 37 COMP. GEN. 287

TRANSPORTATION - STORAGE-IN-TRANSIT PRIVILEGES - INCREASED FREIGHT RATES - RETROACTIVE APPLICATION AN INCREASED FREIGHT RATE IN AN AMENDED QUOTATION WHICH BECAME EFFECTIVE WHILE A GOVERNMENT SHIPMENT WAS IN STORAGE AT THE TRANSIT POINT IS INAPPLICABLE UNDER A STORAGE-IN-TRANSIT CONTRACT WHICH BECAME EFFECTIVE WITH THE ACCEPTANCE OF THE GOODS AT THE INITIAL POINT OF ORIGIN AND ENTITLED THE GOVERNMENT TO HAVE THE GOODS TRANSPORTED TO THE FINAL DESTINATION AT THE FREIGHT RATE IN EFFECT WHEN THE SHIPMENT COMMENCED.

TO THE GULF, MOBILE AND OHIO RAILROAD COMPANY, OCTOBER 31, 1957:

REFERENCE IS MADE TO YOUR REQUEST, FILE NO. GOVT. G-44329-CL-48, FOR REVIEW OF THE DISALLOWANCE BY OUR TRANSPORTATION DIVISION OF YOUR CLAIM, PER SUPPLEMENTAL BILL NO. G-44329-A, FOR ADDITIONAL FREIGHT CHARGES IN THE AMOUNT OF $40.35, ALLEGED TO BE DUE FOR THE TRANSPORTATION OF A SHIPMENT OF GOVERNMENT PROPERTY ORIGINATING AT ACCOTINK, VIRGINIA, ON AUGUST 23, 1951, AND TRANSPORTED ON GOVERNMENT BILL OF LADING NO. WV-8216353 TO MEMPHIS, TENNESSEE, FOR TRANSIT UNDER THE PROVISIONS OF ASSOCIATION OF AMERICAN RAILROADS SECTION 22 QUOTATION NO. 16-F. THE SHIPMENT WAS REFORWARDED FROM THE TRANSIT STATION TO NEW ORLEANS, LOUISIANA, FOR EXPORT, ON GOVERNMENT BILL OF LADING NO. WZ-T-271466, DATED JULY 24, 1953. THE SHIPMENT WAS IN STORAGE AT THE TRANSIT STATION FOR MORE THAN 12, BUT LESS THAN 24, MONTHS.

THE RECORD SHOWS THAT YOU ORIGINALLY CLAIMED AND WERE PAID $149.24 FOR THE OUTBOUND TRANSIT MOVEMENT, COMPUTED ON THE BASIS OF A THROUGH SECOND- CLASS RATE OF $3.15 PER 100 POUNDS, PLUS 15 PERCENT, LESS $487.20 SHOWN AS HAVING BEEN PAID FOR THE TRANSPORTATION INTO THE TRANSIT POINT, PLUS CHARGES FOR TRANSIT AND OUT-OF-LINE HAUL. THE AMOUNT PAID ORIGINALLY WAS LATER REDUCED FROM $149.24 TO $131.18 BY DEDUCTING $18.06 IN MAKING PAYMENT OF AMOUNTS OTHERWISE DUE YOU. IN THE AUDIT OF THE THROUGH CHARGES WE USED A THROUGH RATE OF $2.23 PER 100 POUNDS, WHICH WAS IN EFFECT AT THE TIME THE SHIPMENT ORIGINATED AT ACCOTINK, VIRGINIA, AND YOU WERE REQUESTED TO REFUND AN ADDITIONAL OVERPAYMENT OF $57.68. THE ADDITIONAL FREIGHT CHARGES NOW CLAIMED BY YOU ARE COMPUTED ON THE BASIS OF A THROUGH RATE WHICH BECAME EFFECTIVE WHILE THE MATERIALS SHIPPED WERE STORED AT THE TRANSIT POINT, PRIOR TO THE OUTBOUND MOVEMENT. YOUR CLAIM IS BASED UPON THE PROVISIONS OF ITEM 6 (B) OF QUOTATION NO. 16-F, AS MODIFIED BY AMENDMENT 61, ISSUED WHILE THE SHIPMENTS WERE IN STORAGE AT THE TRANSIT STATION, WHICH PURPORTED TO APPLY ON ALL SHIPMENTS ON HAND AT THE TRANSIT POINT OR EN ROUTE TO A TRANSIT POINT ON DECEMBER 31, 1952.

THE CONTRACT OF CARRIAGE COMES INTO EXISTENCE, AND THE RIGHTS AND LIABILITIES OF THE PARTIES ARE DETERMINED WHEN THE COMMODITIES TO BE TRANSPORTED ARE DELIVERED TO AND ACCEPTED BY THE CARRIER FOR CARRIAGE AND THE BILL OF LADING IS ISSUED. SEE MISSOURI PACIFIC RY. V. MCFADDEN, 154 U.S. 155; IRON MOUNTAIN RY, V. KNIGHT, 122 U.S. 79; POLLARD V. VINTON, 105 U.S. 7, 8; THE DELAWARE, 14 WALL. 579; CHARLES J. WEBB AND SONS V. CENTRAL R. CO., 36 F.2D 702. THE ARRIVAL OF THE SHIPMENT AT THE TRANSIT STATION DOES NOT COMPLETE THE CONTRACT OF CARRIAGE, SINCE THE TRANSIT PRIVILEGE IS BASED ON THE THEORY THAT THE CONTRACT OF CARRIAGE HAS NOT BEEN COMPLETED AND THAT THE ENTIRE SHIPMENT FROM ORIGIN THROUGH THE TRANSIT POINT TO FINAL DESTINATION IS THE SAME IN PRINCIPLE AS IF THE SHIPMENT HAD MOVED WITHOUT TRANSIT. SEE CENTRAL R. OF N.J. V. UNITED STATES, 257 U.S. 247, 257; LARABEE FLOUR MILLS CO. V. CHICAGO, B. AND Q.R., 223 I.C.C. 55, 64; WHEELOCK AND BIERD V. AKRON C. AND Y. RY., 179 I.C.C. 517.

THE CONTRACT OF CARRIAGE IN THIS CASE CAME INTO EFFECT WITH THE ACCEPTANCE OF THE GOODS FOR TRANSPORTATION AT ACCOTINK, VIRGINIA. AT THAT TIME THE GOVERNMENT OBTAINED THE RIGHT UNDER THE PROVISIONS, THEN IN EFFECT, OF QUOTATION 16-F TO SHIP THE GOODS TO THE TRANSIT STATION FOR STORAGE FOR A PERIOD NOT TO EXCEED 24 MONTHS AND TO RESHIP THE GOODS TO THEIR ULTIMATE DESTINATION AT THE LOWEST THROUGH RATE (JOINT OR COMBINATION) IN EFFECT FROM THE INITIAL POINT OF ORIGIN TO THE DESTINATION OVER A ROUTE VIA THE TRANSIT POINT IN EFFECT ON THE DATE OF SHIPMENT FROM THE INITIAL POINT OF ORIGIN. YOUR CLAIM FOR AN INCREASED FREIGHT RATE UNDER THE PROVISIONS OF THE SUBSEQUENTLY ISSUED AMENDMENT TO THE QUOTATION CONSTITUTES AN ATTEMPT TO REPUDIATE THE ESTABLISHED CONTRACTUAL ARRANGEMENT.

IT DOES NOT APPEAR THAT THE GOVERNMENT HAS RECEIVED ANY BENEFIT OR CONSIDERATION, IN ADDITION TO THAT CONTEMPLATED AT THE TIME THE CONTRACT OF TRANSPORTATION WITH PROVISION FOR STORAGE IN TRANSIT WAS FORMED, WHICH WOULD SUPPORT THE RETROACTIVE INCREASE IN THE THROUGH RATE ATTEMPTED TO BE IMPOSED BY ITEM 6 (B), QUOTATION 16-F, AS AMENDED BY AMENDMENT 61. CONSEQUENTLY, THAT PROVISION CAN HAVE NO APPLICATION TO THE INVOLVED TRANSIT SHIPMENTS.

THE INTERSTATE COMMERCE COMMISSION HAS HELD THAT THE APPLICABLE RATE FOR A THROUGH MOVEMENT IS THE RATE IN EFFECT AT THE TIME THAT THE SHIPMENT MOVES FROM THE INITIAL POINT OF ORIGIN, SINCE THE RATE, EITHER JOINT OR COMBINATION, APPLICABLE TO A THROUGH MOVEMENT IS A SINGLE UNIT WHICH COMES INTO EFFECT AND BINDS THE PARTIES WHEN THE SHIPMENT COMMENCES, AND WHICH CANNOT BE CHANGED WITH RETROACTIVE EFFECT. SEE IN THE MATTER OF THROUGH ROUTES AND THROUGH RATES, 12 I.C.C. 163. THE COMMISSION HAS CONSISTENTLY APPLIED THIS RULE TO TRANSMIT SHIPMENTS, HOLDING THAT SINCE THE ENTIRE SHIPMENT FROM ORIGIN THROUGH THE TRANSIT POINT TO DESTINATION IS VIEWED AS IF THE SHIPMENT HAD MOVED CONTINUOUSLY WITHOUT TRANSIT, THE APPLICABLE RATE IS THE RATE IN EFFECT WHEN THE SHIPMENT COMMENCES AT THE INITIAL POINT OF ORIGIN. SEE PACIFIC CHEMICAL AND FERTILIZER CO. V. PENNSYLVANIA R. CO., 270 I.C.C. 193, 195; GERRARD CO. V. BELT RY. CO OF CHICAGO, 270 I.C.C. 59, 62; SOUTHWESTERN MILLING CO., INC. V. CHICAGO, B. AND Q.R., 159 I.C.C. 372; BOARD OF TRADE OF THE CITY OF CHICAGO V. ANN ARBOR R., 39 I.C.C. 643, 651; MINNEAPOLIS TRAFFIC ASSOCIATION V. ANN ARBOR R., 42 I.C.C. 76; IN RE MILLING-IN-1TRANSIT RATES, 17 I.C.C. 113.

IN VIEW OF WHAT HAS BEEN SAID ABOVE, IT APPEARS THAT THE DISALLOWANCE OF YOUR CLAIM WAS CORRECT, AND IT IS, THEREFORE, SUSTAINED. THE OVERPAYMENT OF $57.68 SHOULD BE REFUNDED PROMPTLY, OTHERWISE THERE WILL BE FOR CONSIDERATION THE DEDUCTION OF THIS AMOUNT FROM OTHER AMOUNTS WHICH MAY BE FOUND DUE YOU.